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Who Is Hit Hardest during a Financial Crisis? The Vulnerability of Young Men and Women to Unemployment in an Economic Downturn

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  • Verick, Sher

    () (ILO International Labour Organization)

Abstract

The current financial and economic crisis has resulted in the worst global recession since World War II. The subsequent destruction of jobs and increased duration of joblessness will ensure that unemployment across the world will continue to rise and stay stubbornly high for some time to come, well after the economy has begun to recover. Beyond this generalization, such downturns have more adverse implications for vulnerable segments of the population such as youth. As presented in this paper, data for both the current and previous financial crises reveals that young people are indeed hit hardest as reflected by rising unemployment rates, which persist long after the economy is growing again. In the wake of the present downturn, young men have been particularly affected, which has been driven by a range of factors including the high proportion of young men in heavily impacted sectors such as construction. In response to this situation, policymakers should utilize targeted crisis interventions that aim to keep youth employed where possible, while also assisting new entrants and those who have lost jobs find employment (or at a minimum stay attached to the labour force), particularly as the economy recovers.

Suggested Citation

  • Verick, Sher, 2009. "Who Is Hit Hardest during a Financial Crisis? The Vulnerability of Young Men and Women to Unemployment in an Economic Downturn," IZA Discussion Papers 4359, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4359
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    References listed on IDEAS

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    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Is the 2007 U.S. Sub-Prime Financial Crisis So Different? An International Historical Comparison," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 56(3), pages 291-299, September.
    2. Bell, David N.F. & Blanchflower, David G., 2009. "What Should Be Done about Rising Unemployment in the UK?," IZA Discussion Papers 4040, Institute for the Study of Labor (IZA).
    3. David Haugh & Patrice Ollivaud & David Turner, 2009. "The Macroeconomic Consequences of Banking Crises in OECD Countries," OECD Economics Department Working Papers 683, OECD Publishing.
    4. Reinhart, Carmen M. & Rogoff, Kenneth S., 2013. "Banking crises: An equal opportunity menace," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4557-4573.
    5. Seppo Honkapohja & Erkki Koskela, 1999. "The economic crisis of the 1990s in Finland," Economic Policy, CEPR;CES;MSH, vol. 14(29), pages 399-436, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    youth unemployment; financial crisis; unemployment;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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